Harrington Raceway got its table gaming operations officially up and running this past Friday, to the minor chagrin of Atlantic City casino interests in southern New Jersey
. The move equates to even more competition for the former holders of the well-known east coast gaming monopoly. According to one gaming analyst, as more states ramp up their gambling offerings, the AC casinos will continue to see their large bottom lines take a hit.
According to an article on pressofatlanticcity.com, Wall Street gaming analyst Andrew Zarnett, of Deutsche Bank, has stated that the Atlantic City market will continue to feel the effects.
The article states that Delaware will 'steal' about five per cent of Atlantic City’s table-game business, followed by an extra 20-per-cent hit from the more formidable Pennsylvania casinos once they introduce table games this summer. The report also states that Atlantic City raked in a whopping $1.2 billion in table-game revenue in 2009, therefore a 25 per cent loss would equate to $300 million.
“Of course there will be cannibalization of the Atlantic City market,” Zarnett was quoted as saying. “The casinos that are already losing money are in the most danger. You can’t lose money forever. You either have to fix your cost structure or end up closing.”
According to the article, Zarnett believes the candidates most likely to shut down are the Atlantic City Hilton Casino Resort, Resorts Atlantic City and Trump Marina Hotel Casino. Each of those casinos continues to post negative operating income and has been losing market share every month, he noted.
“Delaware will be a relatively small hit,” said Don Marrandino, president of the Bally’s, Caesars, Harrah’s Resort and Showboat casinos owned by Harrah’s Entertainment Inc. “It will certainly be in the low single digits, around 1 or 2 per cent. That doesn’t keep me awake at night.”
When asked, Marrandino did not speculate as to what effect further gaming expansion in Pennsylvania will have on business.
The article goes on to state that Zarnett has predicted that Atlantic City revenue will not bottom out until the end of 2011, and that it will finally level off at $3.3 billion annually, compared to $3.9 billion in 2009 and $5.2 billion at its 2006 peak. By late 2011, two or three of the weaker casinos could close, he said.
(With files from pressofatlanticcity.com)